Charter plc - Adoption of International Financial Reporting Standards
17/06/2005
Charter is required to publish its financial statements in accordance with International Financial Reporting Standards (‘IFRS’) with effect from 1 January 2005. As part of its transition Charter is presenting financial information prepared in accordance with IFRS for the year ended 31 December 2004.
Results for the year ended 31 December 2004 under UK Generally Accepted Accounting Principles (‘UK GAAP’) were announced on 23 March 2005 and are available on the Charter website www.charterplc.com.
Overview of impact
Highlights |
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| Year ended 31 December 2004 | |||||
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Profit before tax |
Net assets | |||
| £m |  |
£m | |
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| UK GAAP | 28.1 | 97.9 | |||
| Post-retirement benefits | 5.4 | (81.3) | |||
| Property revaluations on transition | (0.2) | 15.6 | |||
| Capitalised development costs | 0.2 | 1.6 | |||
| Goodwill | 1.2 | 1.8 | |||
| Reclassification of associates' tax | (1.7) | - | |||
| Deferred taxation (net) | - | (2.1) | |||
| Other items | - | 0.2 | |||
| 33.0 | 33.7 | ||||
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| Items not related to underlying business performance: | |||||
| Goodwill on business disposal |
6.0 | - | |||
| Unauthorised payments arising in prior years |
5.0 | - | |||
| Foreign currency losses on inter-companyloan element of net investments |
(6.2) | - | |||
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| 37.8 | 33.7 | ||||
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| UK GAAP | IFRS | ||||
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| 2004 earnings per share (pence) | |||||
| Headline | 10.4 | 18.4 | |||
| Adjusted (see note below) | 16.0 | 19.8 | |||
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For the year ended 31 December 2004, the impact of the adoption of IFRS is to increase profit before tax by 35 per cent and headline earnings per share by 77 per cent. However after adjusting for the effects of exceptional items and other items not related to the underlying business performance (see note below) the adjusted earnings per share increases from 16.0 pence under UK GAAP to 19.8 pence under IFRS, an increase of 24 per cent. This increase arises almost entirely from a reduction in employee post-retirement benefit costs under IFRS. Net assets at 31 December 2004 are reduced by 66 per cent principally due to the inclusion of additional liabilities for employee post-retirement benefits partly offset by one-off property revaluations.
Note: To help provide a better indication of the group’s underlying business performance, items which are both material and non-recurring are presented as exceptional items. UK GAAP adjusted earnings per share excludes exceptional items and goodwill amortisation. IFRS adjusted earnings per share excludes exceptional items (measured on an IFRS basis) and foreign currency losses on inter-company loans.
Contact
Robert Careless, Finance Director +44 (0) 20 7404 5959
Andrew Fenwick; Pamela Small, Brunswick +44 (0) 20 7404 5959
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